kincaid companys retained earnings balance on january 1 was $5,000. during the current year, kincaid earned…

kincaid companys retained earnings balance on january 1 was $5,000. during the current year, kincaid earned $2,900 in revenues and incurred $4,500 in expenses. kincaid declared and paid $2,200 in dividends, all in cash. after the closing entries are made, kincaids retained earnings balance on december 31 will be:\n\na. $5,700\nb. $3,400\nc. $1,200\nd. $5,000

kincaid companys retained earnings balance on january 1 was $5,000. during the current year, kincaid earned $2,900 in revenues and incurred $4,500 in expenses. kincaid declared and paid $2,200 in dividends, all in cash. after the closing entries are made, kincaids retained earnings balance on december 31 will be:\n\na. $5,700\nb. $3,400\nc. $1,200\nd. $5,000

Answer

Explanation:

Step1: Calculate net income

Net income = Revenues - Expenses. Net income = (2900 - 4500=- 1600) (a loss).

Step2: Calculate ending retained earnings

Ending retained earnings = Beginning retained earnings+Net income - Dividends. Ending retained earnings=(5000+( - 1600)-2200). First, (5000+( - 1600)=5000 - 1600 = 3400). Then, (3400-2200 = 1200).

Answer:

C. $1,200